Medicare chief delivers bad news to governors

Boise, Idaho  A top federal health official told the nation's governors Monday not to count on support for one of their key priorities getting Washington to pick up a greater share of the costs of providing health care to the poor.

"We can't always give you more money. I know that's frustrating," Medicare Administrator Tom Scully said at a meeting of the National Governors Assn. "But we are trying to help you ... make the money you have go as far as you can."

Scully delivered the bad news as some 30 governors gathered in Boise in search of ways to cut costs and increase revenue to close budget deficits.

They had hoped to get some immediate help from the Bush administration through legislation that would increase the amount the federal government contributes to Medicaid, the state-federal health insurance program for the poor.

A measure in the Senate would provide an additional $4.5 billion in Medicaid money over the next 18 months and a block grant of $4.4 billion that states could use for health care or social services.

Governors consider the measure vital, noting that Medicaid spending increased 13 percent in the last fiscal year and now constitutes 20 percent of state budgets.

"It's going to prevent some cutbacks in services that are badly needed," said Kentucky Gov. Paul Patton, incoming chairman of the NGA. "It's going directly to benefit programs for disadvantaged people."

Congressional approval faces an uphill battle in light of the federal budget picture. The government is $165 billion in the hole $59 billion more than had been expected.

The House last month approved legislation that would spend $320 billion over 10 years to add a prescription drug plan to Medicare, the health insurance program for senior citizens. Under the measure, the federal government could gradually assume the cost of drugs for about 7 million senior citizens eligible both for Medicare and Medicaid, meaning a possible $38 billion in savings for the states.

"It's probably the single biggest thing we could do in the federal budget that would take pressure off the states," Scully said. "This is bigger than almost anything else you're talking about."

Mississippi Gov. Ronnie Musgrove said the difference between the proposals is that the first would provide immediate relief to the states, while the second is a long-term approach.

"There is an immediate, short-term problem in the financial situation," Musgrove said.

The discussion came as the Senate prepared to begin debate this week on increasing the availability of less-expensive generic drugs and expanding Medicare to help senior citizens pay for their prescriptions.

Health care consultant Christopher Jennings, former senior health policy adviser to President Clinton, urged the governors to continue pushing the Medicaid relief proposal, noting there also is no guarantee about the final outcome of the prescription drug plan.

"If you rely solely on a drug benefit for the financial relief you hope to get, you may be putting too many eggs in one basket," Jennings said.